Market report

US plunges on recession fears after UK ends on high note


10pm: US Markets plummet

Wall Street

US stocks plunged ahead of the Fed’s next interest rate hike, with concerns that a very aggressive approach could further impact the economy.

Economic data this week showed the country’s gross domestic product contracted 1.4% year-over-year in the first quarter. This is critical as it’s the first time since Q1 2020 that US’ GDP has shrunk as much.

And amid fears of recession are other negative macro factors, including rising inflation, a COVID infection surge in China and the geopolitical uncertainty around the Russia-Ukraine war.

The tech-based Nasdaq has fallen more than 13% in April, making this its worst monthly performance since 2008.

The S&P 500 and Nasdaq have posted their worst month since March 2020. The S&P 500 shed 8.8% over the month and the DJIA lost 4.9%.

Amazon shares fell more than 14% after the tech giant reported disappointing earnings in its first-quarter results (see below).

London closes on upbeat tone

London Stock Exchange

UK traders went into the Bank Holiday weekend in an upbeat mood amid some solid corporate updates.

The FTSE 100 ended the session up 35.36 points at 7,544.55, while the FTSE 250 was 0.43% firmer.

Johnson Matthey soared 18.89% after reports that the Standard Investments arm of US firm Standard Industries had taken a 5.23% stake in the chemicals company.

Education publisher Pearson added 1.92% after saying it would receive a one-off tax boost this fiscal year as it maintained annual guidance.

However, despite profits rising 41% in the first quarter, NatWest closed down 2.2% as investors drew caution from the cost of living squeeze.

8am: Menzies adds Latin country

Menzies Aviation has announces the acquisition of a controlling stake in Agunsa Aviation Services, which provides full ground and air cargo handling services in Santiago, Chile, to several major international airlines at Santiago de Chile Airport (SCL), including United Airlines, Delta Air Lines and Qatar Airways.

This new Chilean business will complement Menzies’ existing operations in five other countries in Central and South America including Mexico, Colombia, Costa Rica, El Salvador and Guatemala.

7am: NatWest (RBS) profits rise

Royal Bank of Scotland Gogarburn

NatWest (RBS) has posted a 41% surge in first quarter profits. ahead of forecasts, as rising interest rates and higher income boosted the bank’s performance.

Pre-tax profit came in at £1.2 billion for the first three months of the year, up from £885m the previous year, restated to exclude its now divested Irish business Ulster Bank.

Full story here

See also: NatWest bosses win pay hike.. and a pledge on the Edinburgh HQ: full AGM report

Amazon setback

Amazon left Wall Street shaken last night by unexpectedly announcing its first quarterly loss since 2015 and forecasting a slowdown in growth as online spending has slowed.

Shares in the world’s largest retailer dropped by almost 12% in after-hours trading after it reported its smallest rise in sales in two decades.

Overall net sales across the business increased by 7% to $116.4 billion in the three months to March as its retail division fell into decline. Revenue from its online stores business fell 3% to $51.1bn.

The group made a net loss of $3.8bn in the quarter, down from a profit of $8.1 billion the previous year, a reverse attributed to the market rout of Rivian Automotive, the electric vehicle start-up in which it owns a significant stake.

It also dampened expectations for the present quarter, during which it is set to generate sales of between $116bn and $121bn. Analysts had been projecting about $125.5bn.

Apple shares fell 2.2% after hours

For the three months ended 26 March, the Cupertino, California-based iPhone maker reported net income of $25.01bn, up 5.8% from $23.63bn the same period a year before.

Global markets

The Dow Jones Industrial Average advanced 1.9%, the S&P 500 surged 2.8%, and the Nasdaq Composite jumped 3.1%.

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